Applied Digital Shares Surge After Major AI Lease Agreement

Ellendale, North Dakota — Applied Digital‘s stock rose nearly 48% on Monday following the company’s announcement of two significant lease agreements with AI infrastructure provider CoreWeave. The deals, valued at approximately $7 billion over 15 years, signify a strategic move for Applied Digital as it expands into data center real estate.

The lease agreements stipulate that Applied Digital will supply 250 megawatts (MW) of power for IT load at its Ellendale campus, specially designed for high-performance computing and artificial intelligence operations. CoreWeave, which is backed by Nvidia, is set to utilize this facility to support its AI technologies.

Wes Cummins, CEO of Applied Digital, described the partnership as a crucial step in the company’s development of advanced compute infrastructure. He emphasized that these long-term contracts will not only enhance Applied’s revenue potential but also solidify its role in the growing AI sector.

The contracts cover two blocks of power: a 100 MW block and a 150 MW block. Additionally, CoreWeave has the option to lease a third 150 MW block, potentially bringing the total capacity of the campus to 400 MW. The first phase of the facility is expected to be operational by the end of 2025, followed by the second phase in mid-2026.

This announcement also led to a rise in CoreWeave’s stock, which increased by about 8% on the same day. CoreWeave has been gaining traction in the cloud computing landscape, particularly for AI applications, and this agreement positions both companies to benefit from the escalating demand for AI services.

Moreover, Nvidia’s involvement underscores the synergy within this deal, as the chip manufacturer holds significant shares in both Applied Digital and CoreWeave. This relationship intends to optimize the infrastructure necessary for groundbreaking AI developments.

In conclusion, the Ellendale campus, designed for energy efficiency and rapid scalability, reinforces Applied’s strategy to establish itself as a key player in the AI data center market. As demand for cloud services powered by AI continues to surge, these long-term agreements are poised to deliver substantial revenue growth for Applied Digital.